Utility seeks PSC approval of 8-percent rate hike

FRANKFORT — One week after filing a request for a 31-percent rate increase with the state Public Service Commission in what company officials described as a backup plan, Kentucky Power is seeking to hammer through its original plan for an 8-percent hike, despite some powerful opposition.

The utility filed proposed settlement agreement with the PSC on July 2 seeking approval of a plan to transfer half of AEP Ohio’s Mitchell Power Plant, in Moundsville, W.Va., to Kentucky Power, to replace the power generation of the Big Sandy Power Plant Unit 2 generator, which is slated for closure in 2015.

When Kentucky Power sought to purchase the half-interest in the Moundsville plant, three parties intervened before the PSC, including the Sierra Club, Kentucky Industrial Utilities Customers and Attorney General Jack Conway’s office. After negotiating an agreement that will see Kentucky Power invest $100,000 a year in economic development efforts in Lawrence and surrounding counties, as well as a 20-percent bump in the utility’s heating assistance program, all but the AG’s office have signed on.

“Kentucky Power is pleased to reach terms of this settlement agreement with two of the three intervening parties in this case,” said Greg Pauley, Kentucky Power president and chief operating officer. “We hope the commission will review this filing and agree that it is in the best interest of our ratepayers. It definitely presents a more affordable way forward for our customers and allows us to meet our environmental obligations.”

In a letter to the editor to The Floyd County Times earlier this month, Conway said he continues to object, both to the 31-percent proposal and the 8-percent hike. He says the settlement would leave the door open for Kentucky Power to hit customers with an even higher rate increase after 18 months.

“While it is correct that the MoU would limit the rate increase to 8 percent, it is only temporary,” Conway wrote in the letter. “As per the MoU, Kentucky Power agrees to delay its 31-percent rate increase, or an even higher amount, for a period of 18 months.”